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Stories Added - September 2009
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County Judge: A penny goes a long way
Polk County Enterprise - September 2009
BY VALERIE REDDELL
LIVINGSTON — Three Polk County taxpayers appeared at the second public hearing on the proposed ad-valorem tax rate to ask commissioners to set a rate lower than the 62.77 cents per $100 valuation that has been in effect for several years. Keith Anderson, a resident of the Barnes community near Camden, told commissioners “the trickle down effect of the troubled economy is already hurting businesses and individuals on a local level and I hate to see the county add to that burden.” Anderson encouraged commissioners to consider additional revenue streams to reduce the dependence on property taxes.
County Judge John Thompson responded that the county is limited to options specifically spelled out by the Texas Legislature. “There are many things that make good business sense that we can’t do. We don’t get to write our own play book,” Thompson said. Texas counties generate an average of 75 percent of their operating revenue from advalorem taxes. Polk County derives about 68 percent of its income from property taxes. In Florida that average is closer to 10 percent.
The Texas Association of Counties has asked the Legislature for an interim study in the last two sessions to explore different ways to come up with revenue. Anderson cited examples of fundraisers in Bossier City, La. and Ouray, Calif. that generate a lot of money due to their popularity. Bossier City uses donated supplies and labor to build a house that is raffled off for $100 a ticket. In California, Ouray officials have raffled off a Jeep every year for the last 25 years. Both of those methods are not permissible under Texas law, according to Assistant District Attorney Mike Matthews.
Anderson also encouraged county officials to work to attract more businesses, especially recessionproof businesses like the prison system, oil and gas industries and alternate energy providers. He added that current assets such as the Livingston airport and hospital could be promoted more to help draw business prospects. Thompson said the Polk County Industrial Development Corporation is a joint effort among local business leaders to recruit new business to the community. “We are currently competing with one site in Mississippi for a firm with 600 employees,” Thompson said. Thompson added that the county has to depend on another entity to determine what monies it has to work with.
“The Appraisal District furnishes those figures and we, by statute, have to stay out of their business,” he added. The proposed rate is expected to generate $15,573,604.33 in revenue for Polk County compared to the 2009 budget (as amended to date) which generated $14,955,657.40, according to data provided by the County Judge’s office. The increased revenues result from rising taxable values in the county. County Judge John Thompson explained during the hearing that the proposed 2010 budget was drafted to simply “hold what we’ve got” for the upcoming fiscal year.
Thompson said he began work on the budget back in May and met with every department head and elected official funded through the county budget. There are no layoffs and no new positions other than two jobs that are funded by grants, he said. “The only thing an employee or elected official will see is another $60 longevity pay for serving another year with the county,” Thompson said. The cost of other employee benefits — chiefly health insurance — went up, but those increases were less than the average increase in the health insurance market. The average homestead value in Polk County is $61,000,” Thompson said.
“If we take a one penny reduction, that would save that homeowner $6.10 a year or 51 cents a month.” From the county’s point of view, that one penny assessed to all taxpayers raises a quarter million dollars. That quarter million dollars equates to five and a half deputy sheriffs, Thompson said. That one penny of the tax rate could also be equated to 81 percent of the annual budget for the emergency management program. “That’s a service which we have, unfortunately, used too many times in recent years,” the judge added.
That one cent could also fund all 11 fire departments that receive a portion of their operating funds from the county or cover the expenses for all our state law enforcement presence — DPS, License and Weight, Game Wardens and the Texas Ranger, according to Thompson. Thompson added that the Commissioners Court has heard a lot of testimony about the growing population and growing needs and growing expectations from the public to do more, not less. Danny Freeman told commissioners he had researched the personnel numbers himself and found that comparing employee counts on Aug. 1, 2008, and Aug. 1, 2009, showed there were eight additional employees instead of two.
Thompson and his staff responded that those numbers reflected changes in the number of vacancies, not in budgeted staff positions. “At any given time there are vacancies at the sheriff’s department and the jail,” Thompson said. “There are also changes when department heads combine part time positions into one full time job or vice versa. Also, the dates given by Danny Freeman would coincide with expenses in the 2008 and 2009 budget years, not the proposed 2010 budget. Kathy Freeman renewed her request to lower the tax rate to somewhere in between the 62.77 cent proposed rate, and the 58.42 effective tax rate. “We all have cut back on expenses, everyone has.
If we could just convince y’all to drop that somewhere in the middle. Everyone has to tighten their belt. I’m just pleading for everyone that pays property taxes.” “I don’t want anyone to lose their home or to have to eat cat food instead of tuna fish so they can pay their tax bill.” Anderson also testified that he believes property taxes are not equitable. “Let’s assume to make things simple that property taxes are $1 an acre. If Mr. and Mrs. Smith works hard, saves, sacrifices and purchases 100 acres, their tax bill is $100. But if Mr. Jones is one of the 100 people that live on a one-acre apartment complex, those 100 people split the tax and pay one cent each and use far more county services while the Smith family pays a larger portion of the county revenue,” Anderson said.
But actual taxable values are much more complicated. For example, within the Livingston city limits there is a single family residence built in the 1960s on 13,024 square feet of land. A few blocks away a 16- unit apartment complex is situated on 18,513 square feet of land is approximately the same age. The single family residence is listed on the Polk CAD’s tax rolls with a 2008 market value of $78,824 before any exemptions for homestead or over 65 are applied. The apartment complex is valued at $316,345 and, as a commercial property gets no exemptions. Raw, undeveloped property or tracts with agriculture or timber exemptions are taxed at a lower rate than homesteads. Anderson advocated shifting more of the tax burden to sales taxes. “It should produce more revenue for the county because it has so many more contributors,” Anderson said.
“People passing through our county will also be contributing, which lowers the amount county residents need to pay.” Local sales tax are currently at the maximum allowable rate under state law, according to the Texas Comptroller’s office. Anderson also testified that about 4,000 property tax accounts are not currently paying taxes. According to his research, ownership of about 125 tracts is unknown; 3,500 accounts are past due by more than five years, some of them are more than 20 years past due. Over 300 accounts are between one and five years past due, he said. The total backlog of past due taxes is about $3.5 million, Anderson said. Thompson agreed to follow-up personally on any past due accounts on which Anderson has specific information Following the hearing, county officials compared notes on recent sales of property seized for unpaid taxes.
Although there has not been an absolute sale where properties are sold at auction for any price, there are properties sold throughout the year for a fraction of the unpaid taxes. At the last absolute sale, Tax Assessor-Collector Marion “Bid” Smith said one buyer bought up multiple tracts, sold the timber and has not paid any taxes since then. Pct. 4 Commissioner Tommy Overstreet said he has heard from some purchasers from the last absolute sale that took place before he took office. “It took years for them to locate their property only to find that there is no road access.”